MR. STANZEL: This is Scott Stanzel, and I'm going to be joined
today by Deputy Press Secretary Tony Fratto, and I will also be joined
by senior administration officials from the National Security Council,
and they will provide information to you -- they will be referred to as
senior administration officials. This is a background call.

As you know, the point of this call is to talk about the
President's intention to veto H.R. 1585, which is the National Defense
Authorization Act for fiscal year 2008. We did release earlier today a
statement that you can read from. But the President intends to veto
that bill because particular provisions included in the bill would be
unacceptable and interfere with the political and economic progress that
everyone agrees is critically important to bringing our troops home from
Iraq.

So I would point you to that statement that we do have out there.
We also should have a -- you also should have the fact sheet that we've
put out about this issue that you can refer to, as well. But with that,
I will turn it over to the senior administration officials.

SENIOR ADMINISTRATION OFFICIAL: Thank you very much. I'd like to
begin by just renewing the observation that Scott made, that the
President does intend to veto H.R. 1585, which is the National Defense
Authorization Act for fiscal year 2008. He intends to do so because
particular provisions included in that bill unacceptably interfere with
the political and economic progress everyone agrees is critically
important to bringing our troops home.

Section 1083 of the bill would pose extraordinarily grave financial
risks to Iraq that would interfere with Iraq's reconstruction efforts
and tie up billions of dollars in Iraqi funds that our troops in the
field count on to maintain and sustain security gains. We're working
with members of Congress to fix the problem posed by Section 1083 as
soon as possible after Congress returns in January.

SENIOR ADMINISTRATION OFFICIAL: A couple points on why this is so
important. First of all, a pool of this money -- this is reconstruction
funds and part of Iraq's operating budget. Tying up these funds in
litigation -- and it's with a virtual certainty that funds will be tied
up in litigation, regardless of the ultimate merits of a claim -- tying
up those funds in litigation would have a security impact and would
jeopardize our troops in the field.

Everything we're doing on the bottom-up progress, which is now a
common story, to lock in a lot of the gains we've seen in 2007, we're
depending on various things which we've talked about -- Ambassador
Crocker has talked about quite a bit -- about budget execution and
flushing Iraqi funds, billions of dollars, into the provinces to sustain
and lock in some of these gains. This provision would potentially tie
up some of those funds in U.S. courts.

Another issue: The Iraqi parliament returns to session next week;
this provision gives a propaganda victory to elements in Iraq which are
opposed to everything we're trying to do. We've been, obviously, in
close consultation with Ambassador Crocker who said he cannot
overemphasize the devastating impact this would have to our relations
with Iraq in potentially empowering those opposed to Iraq's democracy at
a very sensitive time. Issues of immunity and reciprocity which we
could get into, all are impacted here.

So I think I'll leave it there.

SENIOR ADMINISTRATION OFFICIAL: I'd like to say a few words about
what Section 1083 would do, in particular, vis-a-vis Iraq. Section 1083
would allow Iraqi assets to be attached and frozen solely upon the
filing of a claim in court, and that would be up to the amount of
damages claimed in a lawsuit even before there was any consideration of
the merits of the claim, or the amount of any damages asserted by
plaintiff's counsel.

Section 1083 also would expose both the assets of the Development
Fund for Iraq and assets of the Central Bank of Iraq to prejudgment
attachment, potentially tying up billions in core Iraqi assets while
lawyers go about arguing the merits of cases and the reasonableness of
the actions in courthouses. Section 1083 also would give plaintiffs'
lawyers the ability to seek and impose court orders, freezing assets in
entities in which Iraq or any of its instrumentalities or agencies has
an interest, potentially exposing assets of the United States' joint
ventures with Iraqi national enterprises to attachment and to freezing.

The section also would revive most, if not all, of the previously
dismissed lawsuits against Iraq for former Saddam-era acts, and allow
lawyers the ability to re-file and re-litigate those claims under the
new provisions of Section 1083.

And finally, among the highlights, Section 1083 would also
authorize punitive damages against Iraq, and eliminate Iraq's ability to
assert standard legal defenses that are normally available to defendants
in United States courts.

That concludes the opening remarks.

MR. FRATTO: This is Tony Fratto. I just want to emphasize one
more thing. And you may -- I know some of you have got questions about
this. But within the Defense Authorization bill is a provision for a
3.5 percent pay raise for our military. And you've probably heard some
people talking about this, as to whether that's at risk. And just to
clarify this a little bit, there will be an automatic 3 percent pay
raise that goes to our troops and military, regardless of the
dispensation of this legislation.

What we will do -- we're going to look at two provisions in this
bill for a fix. One is Section 1083, that you just heard a senior
administration official discuss, and the second is dealing with the
point -- the additional 0.5 percent pay raise. Any fix of this bill
would be retroactive to ensure that the troops and military get the full
pay raise that is due to them in this bill. So we just want to make it
clear that nothing that we intend to do, and nothing in this veto is
intended to in any way put at risk the full pay raise for our military
families and their troops.

And with that, I think we can open it up to questions.

Q Thanks. Can I just ask you to give the state of your
negotiations with House and Senate leaders? Who are you negotiating
with, leadership, or the committee chairmen? What's the status of those
meetings, and when is the next meeting expected to happen?

MR. FRATTO: I don't think we can put a fine point on who
specifically. Obviously, the leadership of both parties and both
Houses, and members of the Defense Authorization committees, but I don't
think we're going to talk about which -- when there are meetings or
conversations. I think it's fair to say that they are continuous and
ongoing, and have been going on for a number of weeks.

Q Well, in that case, let me ask you a quick follow-up, which
is, Senator Levin is complaining today that you failed to bring this up
during the long period while this bill was being formed and debated, and
it wasn't in your previous statements of administration policy. Can you
respond to that, why so late with this?

MR. FRATTO: Actually, I think it was raised -- in fact, I'm
certain that it was raised a number of times throughout the legislative
process, in views letters from the department, and certainly in
conversations with the committees. I think we were -- I think it's safe
to say that we were somewhat surprised by the -- that the final language
was as it was in the bill, as it came out, and also learned a great deal
since then what the consequences -- the full extent of the consequences
of the language would be. But I think we have mentioned this a number
of times throughout the process.

Q But not officially? Is that correct?

MR. FRATTO: I'd have to go back and look at the SAPs. I seem to
think it was mentioned in earlier SAPs on the bill. It's correct to say
there wasn't a veto threat specifically on this language. That is
certainly correct.

Q Okay. And did you receive communications from the Iraqi
government asking you to address this recently? Is that why we're now
seeing this today?

SENIOR ADMINISTRATION OFFICIAL: The Iraqis certainly did raise
very serious and strong concerns about this, which were confirmed as we
really dived into this and gamed out the consequences. The strategic
consequences to our position in Iraq and to the protection of U.S.
personnel here are very real, and the impact of the language, given its
strength and given the legal effects -- which I'll let my colleague
speak to -- was something that, really the options here were very
limited. And that's why we're -- we had to go forward with the veto.

SENIOR ADMINISTRATION OFFICIAL: I would also -- I'd supplement
that by saying that the administration did send up a series of so-called
views letters, what are referred to as views letters, as part of the --
(inaudible)* -- process in the dialogue with the Congress on this
particular bill. And at least three of those views letters specifically
objected to the amendments that were being considered to the Foreign
Sovereign Immunities Act, and specifically to what has now become
Section 1083.

I can observe that the Justice Department letter -- it's dated
November 13, 2007 -- spoke at some length about the problems that would
be presented by Section 1083; in at least one sentence, the problems
specific to Iraq were raised. To be sure, though, the acuteness and
intensity of those problems have come into clearer focus within the past
week or 10 days or so.

Q I just read through 1083, and Iraq is not mentioned at all in
it. I realize it's legalistic and all, but can you explain a little bit
about what is the threat of liability to the Iraqi government now? Are
these some of the previous suits that I recall, like from the prisoners
from the first Gulf War in '91? I mean, are there specific cases you
think that would inflict this damage on the Iraqi government you are
talking about?

SENIOR ADMINISTRATION OFFICIAL: Steven, I'd say first, you're
correct to observe that the text does not come out and identify Iraq by
name. It's a provision that is in more general terms, but one that
would have an extraordinarily sharp impact upon Iraq. And I can go
through a couple of the points quickly that I raised before, but there's
no doubt in the legal look that we have taken at this provision within
the executive branch that some of the -- (inaudible) -- and would have
an acute effect. -- (inaudible) -- aspects of Section 1083 are the
provisions that would permit assets to be frozen -- (inaudible) --
simply upon the filing of a claim in a court, without regard to whether
that claim has any merit or not, -- (inaudible) -- the assets and freeze
them.

Q I think you're breaking up a bit on the call. You might want
to get closer to your speaker.

SENIOR ADMINISTRATION OFFICIAL: Simply upon the filing of a claim,
plaintiffs and plaintiffs' lawyers could entangle Iraqi assets up to the
dollar amount that's alleged in a suit. The provision that would expose
Iraq to punitive damages, also completely new and novel in this area of
the law, and could risk extraordinary damage -- (inaudible) --.

There are other provisions in place, too, the upshot of which is
simply that Iraq would have absolutely no certainty as to the status of
its assets and its property. The property would be tied up in
litigation as the matter worked its way through the court and was sorted
out by a judge, and it's a risk that would be intolerable financially
right now to Iraq and would impose, as was mentioned earlier,
extraordinary strains on the relationship at this critical time for
Iraq.

Q Thanks, gentlemen, for doing this. Clarify a couple of
points, please. I think one of you mentioned the idea of a propaganda
victory being proffered if this were to be signed by the President.
Could you clarify -- I didn't quite follow what you meant by that.

SENIOR ADMINISTRATION OFFICIAL: Yes. There are a number of issues
obviously floating around within the Iraqi political dynamic, many of
which you all have covered. One of them, for example, is the question
of immunities for U.S. personnel, and a number of things which we're
going to be discussing with the Iraqis when our bilateral negotiations
for a longer-term partnership begin, which will probably begin very
soon. The issue of immunities for U.S. personnel, for example, has come
up almost every parliamentary session and it's seized upon by the
Sadrists and other groups trying to repeal various provisions, which
would subject all U.S. civilian personnel, in particular, and
contractors, would strip their immunities, which currently are under a
provision of the CPA order.

Those sorts of issues, given this provision, which -- the effect of
it, in the Iraqi mind, is very simple: you're subjecting the Iraqi
government, a democratically elected government of Iraq, to massive and
crippling liability to the crimes and atrocities of the Saddam Hussein
regime. That's how they see it. And frankly, they're right. That's
exactly what this does, and it does it in an unprecedented way. And it
would have a potentially explosive impact within the Iraqi political
system, in terms of moving forward with the negotiations, which we're
going to be undertaking, and in terms of strengthening the elements in
Iraq which desire to build a stable, strong democracy, and build strong,
enduring ties with the United States. So that's just one example.

But we're, obviously, in very close contact, not only with the
Iraqis on this, but also with our diplomats in the field, who appreciate
the potential impact better than anybody, and weighed in very strongly
with the potential consequences should this law go into effect.

Q Could you also clarify what's happened in the last few days
that has, in your view, made it much more clear what the detrimental
impacts of this provision are? What's happened recently if this has
been being discussed for weeks?

SENIOR ADMINISTRATION OFFICIAL: From my perspective, it has been,
we really huddled here internally, and did a very, very close look from
all elements within the executive branch -- and the legal side can speak
to that side -- really analyzing every provision here and every word,
and the potential impact, and gaming out what would happen were this to
be signed into law, even for a limited period of, say, three weeks, were
we to do, for example, a sign and fix scenario. And when that analysis
was done, it just became very clear that the consequences were quite
serious, and the options for managing the risk and managing those
consequences were quite limited.

Q My question is this: Obviously that Section 1083, as I read
it, is designed to get at certain lawsuits that are either in progress
or may be in progress for various reasons. What is your understanding
of which, or what kinds of lawsuits that was put in for? Because
obviously they didn't just get it out of the sky; it was designed to
address something very specific.

SENIOR ADMINISTRATION OFFICIAL: I agree with that entirely. When
you read Section 1083 -- and I would point you to specifically the
provisions in Section 1083 that reopen, if you will, or permit the
reopening of lawsuits that are either in place right now, or most
especially, ones that went forward in the past without success, from the
plaintiff's perspective, and were dismissed. These particular
provisions are designed to breathe new life into those suits. And some
of those suits, we know with absolute certainty, would hit Iraq and
would hit Iraq in the multiple billions of dollars. So I agree
completely with that conclusion.

We also observed that some of the particular conditions or
criterion, if you will, that would need to be satisfied by a plaintiff
seeking to re-file or re-pursue a particular claim, those conditions are
tailored directly to the different factors that courts pointed to in
ruling against plaintiffs in prior cases. You can look -- one comes
right to the top of my head. There's a stripping of defenses that are
commonly available to defendants in this type of litigation. If you
take a look at Section 1083, it's referred to as "common defenses of
collateral, estoppel, and res judicata." Those are eliminated by
statute here, which is an extraordinary step, unprecedented to my
knowledge, for Congress to take, and that would have the exact impact
that you put your finger on, the revitalization of claims.

If there's any doubt at all about whether particular cases were
being thought of, there's one that's actually referenced by docket
number. I don't think it refers -- to my knowledge it's not to Iraq,
but you're absolutely correct to observe that particular cases were in
mind when this text was being drafted.

Q Gentlemen, a couple of questions. The first is, if Section
1083 was specifically designed to allow folks to re-litigate cases
involving prisoners of wars in Iraq that had been dismissed, how did you
miss it? Two, how are you going to get Republicans who joined with
Democrats to pass this by a veto-proof margin to change their votes?

SENIOR ADMINISTRATION OFFICIAL: Let me take the first one. It's
not that we missed it. It's the question of coming into really acute
focus over the past week to 10 days. And I think our consultations on
the Hill -- I mean, the same -- I think members on the Hill have had the
same realization that we have, when you really looked into the many
different subsections of this provision. And it's unfortunate that it
came into focus at a late stage, but fortunately, this is something that
is reversible, and that's what we are working very closely with the
Congress to do.

I would just repeat the points made up front, that we're vetoing
this provision based on a very -- on one particular section of the bill,
and working very closely with Congress to having a very clear way ahead
to put this bill into place as soon as possible, with one technical fix,
which we're finding on the Hill there is general agreement needs to be
taken. So it's unfortunate that it came into such acute focus at a late
stage, but that's just where we are.

Q Can I try once again? There was an SAP on this bill in May,
mid-May, and it makes no reference to this provision, and still you
won't accept that you missed it?

SENIOR ADMINISTRATION OFFICIAL: Let me say this: To my knowledge,
the -- and we could take a look at this to be sure -- but to my
knowledge the amendment in question led to Section 1083 -- (inaudible)
-- in May. It came at a later point in time. And I can tell you that
the very significant concerns with Section 1083 are in the different
views letters that agencies and departments sent up on this. But at the
same time, we need to acknowledge -- as we have -- that the acuteness
and the intensity of the problems that would be posed to Iraq were
identified with much sharper focus in the past 10 days or so.

MR. FRATTO: Yes, Wendell, I think it's -- I think judging from the
reactions that we've heard our White House leg staff that have been in
communication with many, many members of Congress, is that they had
pretty much universal, equal surprise as to the impact and the
implications of this final language. And I think we have to go back --
I don't believe that it was the final language that we ended up with,
with the legislation coming out of Congress is the same language that we
saw back in May. But we do have a record of administration views
letters raising concern with this language and with the direction that
this might have been going.

SENIOR ADMINISTRATION OFFICIAL: I would also add to that the
observation that it is either -- I don't know if it is in the question
or in one of the answers given so far -- that it is unfortunate that we
find ourselves in this situation, but rather than dwell on an
unfortunate circumstance, what we're doing is looking forward. The
problem has been identified; we believe we'll be able to find a
consensus solution with Congress, and to move forward and to get this
fixed before it becomes law. The legal risks are too severe to wait for
it to become law and then to try to fix it after the fact.

Q Thanks, gentlemen. Just one question -- do we have any idea
if there was a particular lawmaker who added this language in late in
the game, or who was responsible for this, based on your discussions?

MR. FRATTO: I think Senator Lautenberg is the sponsor of the
amendment.

SENIOR ADMINISTRATION OFFICIAL: There may be other sponsors, as
well, but Senator Lautenberg is the one that I think offered the
amendment.

MR. FRATTO: One other point -- well, I'll leave it. We'll see if
it comes back.

Q Hi. I guess I'm still unclear about what actually prompted
this coming into, in your words, acute focus in the past week to 10
days. I mean, did Iraq threaten to pull out money from U.S. banks, or
what actually happened that prompted this?

SENIOR ADMINISTRATION OFFICIAL: There was no threat of pulling
money out. What did happen, though, was the Iraqis came to us very
strongly and said this provision will have the following consequences to
our assets. And given the fact that, again, these are reconstruction
funds and this is Iraq's operating budget we're talking about, there are
different pools of funds here, but that has real strategic consequences
for us. And this is something we then looked at very closely, and the
lawyers looked at very closely. And all I can say is the facts that
came to light more recently than we would have liked were corroborated.
It's absolutely true, and the strategic risk to our fundamental vital
national interests in Iraq are at stake here.

And with that, then it comes to what do you do about it, and the
options, again, are limited. And we think we found the best way to go.
And all I can say, from the Iraq side, again, working very closely with
our diplomats in the field, who are as close to this as anybody, and
consequences, again, are very real. And I would just emphasize what my
colleague said -- yes, we wish --it's unfortunate that this is happening
at a late stage, but we are where we are; we think we have a solution
that can go forward quickly. And when most people look at this and game
out the consequences we have, they see that this obviously is something
that would have severe implications for our fundamental and vital
national interests. And therefore, we're working very hard to just find
a quick solution as soon as Congress returns in January.

Q Thanks. Two questions. First of all, how is it the Iraqis
found out the consequences of 1083 before the White House? And
secondly, is there any provision short of tying up the funds in these
accounts that you would support as long as the money wasn't frozen?

SENIOR ADMINISTRATION OFFICIAL: You cut up just a little bit. Can
you ask the last -- just ask your second question again. I got the
first one.

Q The provision the White House would support short of tying up
the funds in these lawsuits from the moment they're filed that would
allow the lawsuits to continue without freezing the funds?

SENIOR ADMINISTRATION OFFICIAL: Section 1083 of this particular
bill does -- (inaudible) -- attachment and liens upon the filing of a
claim. And that is a -- (inaudible) -- extraordinarily serious concern.
But there are other provisions in Section 1083 that also raise very
serious legal risks and pose very serious legal risks to Iran [sic] --
the reinstitution, or the revitalization, if you will, of claims that
were previously dismissed, coupled with the stripping of the standard
defenses that we talked about; the authorization of punitive damages to
be imposed; the -- (inaudible) -- attempt in one particular provision --
(inaudible) -- to eliminate protection that is afforded under statues
that are commonly invoked to protect assets, including the International
Emergency -- statute. There's a provision that is designed to target
it.

So I don't think that the elimination of one particular aspect of
1083 would solve the problem with respect to the whole.

And remind us again of your other question.

Q -- find out about the consequences of 1083 before the White
House?

SENIOR ADMINISTRATION OFFICIAL: We -- I mean, let me reiterate
what we said before in that we've known -- (inaudible) -- has been out
there. The administration objected to it in views letters. As was
indicated and answered just a minute or two ago, it did -- (inaudible)
-- more acute focus, and we benefitted from the dialogue with Iraq on
that. While it's unfortunate, what we want to do is find a consensus
solution to this problem before this becomes law and before it creates
these real and concrete risks to Iraq and to our relationship.

Q Forgive me if I missed this, but is the veto going to happen
today? And secondly, just following up on the question of -- oh, gosh,
I forgot what I was going to say -- is the veto going to happen today?

SENIOR ADMINISTRATION OFFICIAL: I don't know. You saw the
statement go out by the Deputy Press Secretary of the President's intent
to veto, and I don't know as we sit here when --

MR. STANZEL: This is Scott. It will happen before December 31st.
And we'll keep you posted as to when that will happen. But the
announcement today was about the President's intent and we will
certainly notify you as soon as he does veto the bill.

Q And the other thing that I was -- I remembered what I was
going to ask -- was following up on the question about whether Iraq is
-- or was -- contemplating pulling out resources from U.S. banks. One
of you gentlemen said that there hasn't been any threat, but has there
been discussion by Iraq officials of potentially withdrawing assets from
the United States to sort of prevent the devastating impact that you're
describing?

SENIOR ADMINISTRATION OFFICIAL: Yes, of course there was. Iraq
was in a position which it had to manage its risk appropriately, and I
think the most likely course would have been indeed to pull their assets
out of any U.S. jurisdiction, certainly.

SENIOR ADMINISTRATION OFFICIAL: One thing that we should
underscore, against the backdrop of all of these different amendments
that we've spoken about in a couple of these different answers is, you
should consider that all of this is occurring to a statute that
establishes rules on how foreign countries may be sued under U.S. law.
That statute, of course, is the Foreign Sovereign Immunities Act. And
these amendments that would pose such grave risks to Iraq and to our
relationship with Iraq would dramatically change those rules. And in
doing so, it's going to potentially invite foreign governments to take
reciprocal actions, and thereby allow suits to proceed against the
United States, even for legitimate government activities.

So I think there's some documents that are going to go out today to
provide some of that background. It's the amendments that are wrought
by Section 1083 against the backdrop of established practice and
internationally accepted principles in this area that also makes this
such a grave situation.

Q Thanks very much. Last week the Defense Secretary thanked the
Congress for passing the authorization bill, and he had expressed some
relief, as you know, that the passage meant he wouldn't have to
potentially lay off 100,000 DOD civilian workers, re-purpose money from
the Department of Army to help pay for the war in Iraq. With this
decision to veto the authorization, it seems that the White House and
the Congress are back to where they were before the bill was passed. So
my first question is, did the President discuss this with the Defense
Secretary, and what was his reaction to it? And my second question is,
the Chairman of the House Armed Services Committee, Ike Skelton, is now
saying that Congress had pledged less than a week ago that it would
expeditiously, in his words, reconsider this issue, this particular
issue that was raised by the White House. So why a veto?

SENIOR ADMINISTRATION OFFICIAL: Let me address the last part of
the question first, and then revert to my colleague here. We took a
very careful legal look at this, in an awful lot of detail, benefitted
by information provided by Iraq, in the past seven to 10 days, and we
reached the conclusion that the legal risk cannot be reduced and
mitigated by a circumstance in which the bill would be signed into law
and then when Congress returned two weeks, three weeks from now, mid to
late January, and a fix taken up by the Congress; that that situation
was unacceptable, because in that intervening two-to-three-week period
of time, you would have races to courthouses to get claims on file. And
you can rest assured that those -- the plaintiffs and their counsel --
plaintiff's counsel would try to attach and freeze any and all Iraqi
assets that were in any jurisdiction in the United States, including
property interests that were simply flowing through U.S. financial
systems as part of ordinary course activity that Iraq would undertake.
And that put -- that resulted in our concluding that the risk was
intolerable.

SENIOR ADMINISTRATION OFFICIAL: I'll just -- Mr. Skelton's
statement, I think the end of his statement said he'll continue working
with colleagues in the House and Senate and the President to get this
act enacted as soon as possible. And that's what we absolutely agree
with, and we think there's a very easy fix here. We think that will be
done very soon, as soon as Congress comes back into session.

I just can't speak to Secretary Gates' comments. I will say that
this decision has been fully coordinated within the entire executive
branch and has a unanimous backing.

MR. FRATTO: One more thing on that. I'm not sure that Secretary
Gates was referring to the Defense Authorization Act, or whether he was
referring to the emergency supplemental appropriations. I'd want to go
back and take a look at that.

Q Just wondered if it would have any impact on the war against
terror in Afghanistan, and what sort of impact it would have?

MR. STANZEL: Your question is what? This would have an impact on
the war in Afghanistan?

Q Would it have any impact on Afghanistan?

MR. FRATTO: I think the answer to that is, no. I think that we
feel comfortable that the Defense Department will be able to operate
certainly up until the point where we can fix this legislation. Do you
agree?

SENIOR ADMINISTRATION OFFICIAL: Yes.

Q I just wondered -- I'm not sure if you've covered this or not,
first the actual amount of assets that Iran [sic] has in U.S.
institutions, and the other would be, where the actual first word of
this problem came from. Did it come from the Iraqis, the idea that you
really had a problem there?

SENIOR ADMINISTRATION OFFICIAL: In terms of the total assets we're
talking about, $20 billion to $30 billion. But that doesn't count the
commercial joint ventures, which are also captured in this, which is
potentially in the multiple, multiple billions, and has real impacts for
all U.S. businesses doing business with Iraq, which obviously is
something we encourage.

I'm sorry, was your second question, again -- did the Iraqis bring
to this?

Q Where did you actually get the first word that this was a
problem with them?

SENIOR ADMINISTRATION OFFICIAL: When did we get the first word?

Q Yes, and from whom? Did you guys discover it, or did it come
from the Iraqis saying, wait a minute, we have a problem here?

SENIOR ADMINISTRATION OFFICIAL: We discovered it. The Iraqis
raised a serious concern about 10 days or so ago, through our
Ambassador, and then we had a number of consultations at high levels
here with the Iraqis, as well.

Q But before 10 days ago, were you working on it as a potential
problem, or did the fact that it was a problem first come to light when
they raised it with Crocker?

SENIOR ADMINISTRATION OFFICIAL: Again, I think we'll repeat what
we said: We were aware it was a problem; the question is managing the
risks. And I think given when you read the entire provision and you
really look at this as we did, the ability to manage the risks, should
the law go into effect, was simply something that we couldn't go forward
with, given the consequences to our own vital interests. It's a
question of managing risks, and the Iraqis brought some facts to our
attention that were corroborated.

MR. FRATTO: And again, to reemphasize that, I think we've said
we've had a number of views letters on this, and I don't know if you
would have dates on those letters.

SENIOR ADMINISTRATION OFFICIAL: I do have one date. I have one in
front of me, not all of them, but I would point you specifically to the
November 13, 2007 letter that the Justice Department, under the Attorney
General's signature, sent to the leadership of the Armed Services
Committee on the Hill. I know, as well, that the State Department sent
a views letter that raised very serious and grave concerns with Section
1083.

So the general and serious concerns were certainly raised, and has
been indicated in these answers, the more particular and more acute
problems with respect to Iraq came into sharper focus in the last 10
days.

MR. STANZEL: Thank you all for joining; appreciate your time.
Once again, the reiterate, we have put out a statement here. This was a
background call with senior administration officials, and the statement
by the Deputy Press Secretary is available at whitehouse.gov., as is the
fact sheet on the National Defense Authorization Act. So you can
reference that at whitehouse.gov. And I appreciate your time today.